DJs directors off the hook

The settlement of the sexual harassment claim brought by publicist Kristy Fraser-Kirk releases not only
David Jones
and the man at the centre of the case,
Mark McInnes
, but the directors.

Ms Fraser-Kirk alleged the David Jones board knew of ongoing misconduct by Mr McInnes and engaged in misleading and deceptive conduct.

She alleged the directors breached the Trade Practices Act by not correcting comments on June 18 this year to the media by chairman
Bob Savage
(who is also a director of Fairfax Media, publisher of The Australian Financial Review), chief financial officer
Stephen Goddard
and new chief executive
Paul Zahra
.

Ms Fraser-Kirk claimed the comments falsely represented that the incident of sexual harassment at the core of her claim against former chief executive Mr McInnes was “a single event" and the “only complaint that the board of directors or the senior management team knew of" and that “there was no culture of bullying".

Murray Deakin, a partner of Middletons law firm in Sydney, said the allegation was essentially misleading conduct by silence. In his view, it was without merit.

“It can’t be the law of this country that the board of a publicly listed company has to scour the media for comments . . . to satisfy themselves that nothing in the press is false or misleading," he said. “I would be genuinely surprised if that argument were successful."

He said there was a trend towards more boards being sued.

The public airing of the sexual harassment complaint will have caught the attention of boardrooms around the country, according to the sex discrimination commissioner at the Australian Human Rights Commission,
Elizabeth Broderick
.

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“There would not be a chief executive or director around the country who would not be at least asking themselves if sexual harassment was an issue in the workplace,’’ she said.

The high media profile of the case might discourage women as they weighed up the pros and cons of taking action, she said.

“They fear becoming not only a victim of the alleged behaviour but a victim of bringing it to the attention of management.’’

David Jones confirmed yesterday that the case had been settled. Ms Fraser-Kirk will receive $850,000. None of the money will go to charity.

Ms Fraser-Kirk said it was “no longer possible" for punitive damages to be awarded to charity because the court would no longer have to determine such damages.

In a public statement yesterday, Mr McInnes welcomed the end of the saga and said he looked forward to a “new chapter" in his family life and career. “I have repeatedly said that the vast majority of the allegations are simply untrue and the nature of the court proceedings was an abuse of legal process," he said.